BREAKING NEWS: FINAL RULE FY 2024 SNF PPS Issued

Posted in INDUSTRY NEWS, Long-Term Care

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant – Briggs Healthcare

Late afternoon (4:15pm ET to be precise) on Monday, July 31, 2023, CMS filed the Final Rule for FY 2024 for SNF PPS.  The 451-page FR is scheduled for publication in the Federal Register Monday, August 7, 2023.  The public inspection PDF copy is available here.  The associated CMS Fact Sheet: Fiscal Year (FY) 2024 Skilled Nursing Facility Perspective Payment System Final Rule – CMS-1779-Fis also a valuable read to begin your review of the Final Rule.

This final rule updates payment rates, including implementing the second phase of the Patient Driven Payment Model (PDPM) parity adjustment recalibration. This final rule also updates the diagnosis code mappings used under PDPM, the SNF Quality Reporting Program (QRP), and the SNF Value-Based Purchasing (VBP) Program. We (CMS) are also eliminating the requirement for facilities to actively waive their right to a hearing in writing, treating as a constructive waiver when the facility does not submit a request for hearing.

These regulations are effective October 1, 2023, except for the amendments to §§411.15 and 489.20 in instructions 2 and 11, which are effective January 1, 2024.

Table of Contents

I. Executive Summary

            A. Purpose

            B. Summary of Major Provisions

            C. Summary of Cost and Benefits

            D. Advancing Health Information Exchange

II. Background on SNF PPS

            A. Statutory Basis and Scope

            B. Initial Transition for the SNF PPS

            C. Required Annual Rate Updates

III. Analysis and Responses to Public Comments on the FY 2024 SNF PPS Proposed Rule

            A. General Comments on the FY 2024 SNF PPS Proposed Rule

IV. SNF PPS Rate Setting Methodology and FY 2024 Update

            A. Federal Base Rates

            B. SNF Market Basket Update

            C. Case-Mix Adjustment

            D. Wage Index Adjustment

            E. SNF Value-Based Purchasing Program

            F. Adjusted Rate Computation Example

V. Additional Aspects of the SNF PPS

            A. SNF Level of Care–Administrative Presumption

            B. Consolidated Billing

            C. Payment for SNF-Level Swing-Bed Services

            D. Revisions to the Regulation Text

VI. Other SNF PPS Issues

            A. Technical Updates to PDPM ICD-10 Mappings

VII. Skilled Nursing Facility Quality Reporting Program (SNF QRP)

            A. Background and Statutory Authority

            B. General Considerations Used for the Selection of Measures for the SNF QRP

            C. SNF QRP Quality Measures

            D. Principles for Selecting and Prioritizing SNF QRP Quality Measures and Concepts under            Consideration for Future Years: Request for Information (RFI)

            E. Health Equity Update

            F. Form, Manner, and Timing of Data Submission under the SNF QRP

            G. Policies Regarding Public Display of Measure Data for the SNF QRP

VIII. Skilled Nursing Facility Value-Based Purchasing Program (SNF VBP)

            A. Statutory Background

            B. SNF VBP Program Measures

            C. SNF VBP Performance Period and Baseline Periods

            D. SNF VBP Performance Standards

            E. SNF VBP Performance Scoring Methodology

            F. Updates to the Extraordinary Circumstances Exception Policy Regulation Text

            G. Updates to the Validation Process for the SNF VBP Program

            H. SNF Value-Based Incentive Payments for FY 2024

            I. Public Reporting on the Provider Data Catalog Website

IX. Civil Money Penalties: Waiver of Hearing, Automatic Reduction of Penalty Amount

X. Waiver of Proposed Rulemaking

XI. Collection of Information Requirements

XII. Economic Analyses

            A. Regulatory Impact Analysis

            B. Regulatory Flexibility Act Analysis

            C. Unfunded Mandates Reform Act Analysis

            D. Federalism Analysis

            E. Regulatory Review Costs

As always, there’s a LOT of information in this Final Rule to review!  CMS provides these items in the Summary of Major Provisions:

  • The Federal rates in this final rule update the annual rates that we published in the SNF PPS final rule for FY 2023 (87 FR 47502, August 3, 2022);
  • This final rule includes a forecast error adjustment for FY 2024 and includes the second phase of the PDPM parity adjustment recalibration;
  • This final rule also updates the diagnosis code mappings used under the PDPM;
  • The final rule includes updates to the SNF Quality Reporting Program (QRP) and the SNF Value-Based Purchasing (VBP) Program for FY 2024 and future years, including the adoption of a measure intended to address staff turnover, as outlined in the President’s Executive Order 14070 Increasing Access to High-Quality Care and Supporting Caregivers;
  • The rule finalizes a constructive waiver process to ease administrative burdens for CMS related to processing Civil Monetary Penalty (CMP) appeals and
  • Consolidated billing exclusion for marriage and family therapists and mental health counselors from the Consolidated Appropriations Act, 2023.

CMS estimates that the aggregate impact of the payment policies in this rule would result in a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in FY 2024. This estimate reflects a $2.2 billion increase resulting from the 6.4% net market basket update to the payment rates, which is based on a 3.0% SNF market basket increase plus a 3.6% market basket forecast error adjustment and less a 0.2% productivity adjustment, as well as a negative 2.3%, or approximately $789 million, decrease in the FY 2024 SNF PPS rates as a result of the second phase of the Patient Driven Payment Model (PDPM) parity adjustment recalibration.

The PDPM utilizes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10) codes in several ways, including using the person’s primary diagnosis to assign patients to clinical categories. In response to stakeholder feedback and to improve consistency between the ICD-10 code mappings and current ICD-10 coding guidelines, CMS is finalizing several changes to the PDPM ICD-10 code mappings. The ICD-10 code mappings and lists used under PDPM are available on the PDPM website at https://www.cms.gov/Medicare/MedicareFee-for-Service-Payment/SNFPPS/PDPM. [Note: I’ve also provided the direct link – 5th bullet below – in case this hyperlink doesn’t function. At the time of this blog, this link was not working.]

Other associated documents to review that are part of/related to this Final Rule are: